In the unusual world of biotechs, it's all about the news.
An announcement of a biotech company's partnership with a major firm to develop a drug or the disclosure of the results of a pivotal clinical trial can alter the prospects for a drug's approval, said Reni Benjamin, senior biotech analyst with Rodman & Renshaw, a New York investment banking firm. But Fast Track designation is another matter.
"It doesn't change the process of the drug, the potential of the drug or the probability of the drug's success. On a fundamental basis, Fast Track designation means absolutely nothing to me as an analyst," Benjamin said. "A Fast Track designation, frankly, is noise and an opportunity to take some profit."
take note that in the case of SNTA, the fast track announcement did not result in any sustained gain in share price, probably because the market was skittish and has continued to be since that news release. perhaps this is overall. SNTA continues to trade in a range, and when it does break out ,we can hope it will be as a result of positive news possessing some substance. that way it is far more likely to keep its gains rather than go racing back down and as traders look to turn a quick profit.
Thank you for reconfirming my same thoughts. There are those here who believe the PPS is only trading under some technical analysis formation (you are kidding yourselves). We are simply in a trading range until meaningful news comes out. l have my own proprietary trading signals as well (but I wont tell anyone....complete BS). Lol.
excerpt from an article on the fast track process:
A decade ago, the Food and Drug Administration introduced a Fast Track designation for drugs in development that was intended to speed the availability of medical treatments for serious diseases.
However, a seven-month investigation by The Plain Dealer shows that this government blessing has not increased the number of drugs approved or moved them to market faster.
Instead, Fast Track has given the drug industry, which came up with the idea for the designation and lobbied for its passage, a device that promises a lot but delivers little to anyone but investors. The news of Fast Track designation creates a boon for day traders, hedge
funds and others looking to make quick money off biotech stocks.
Some biotech executives also have tried to turn the FDA's Fast Track designation into personal gain.
Top managers and directors have received stock option grants that coincided with announcements that the FDA had put their firms' drugs on the regulatory Fast Track, according to federal securities records. That news usually increases the value of the stock
Overall, since 1998, Fast Track announcements for nearly 200 drug treatments triggered one-day stock price increases that averaged 10 percent for biotechs and pharmaceutical companies, according to The Plain Dealer's analysis of publicly traded firms.
The announcements also frequently set off trading binges for the same stocks, one-day increases in shares bought and sold that average almost 1,300 percent. A Fast Track announcement from one Silicon Valley biotech firm in 2003 generated a one-day increase in trading volume of more than 52,000 percent.
That's a lot of wheeling and dealing to be sparked by a non-event.
The Fast Track designation is not an indication that a drug willbe proven safe and effective. In fact, half of these drugs have been scrapped by developers or have had serious setbacks. Most will never win FDA approval.